European Union (Withdrawal) Bill

John Baron Excerpts

Wednesday 13th June 2018 Commons Chamber

[Keir Starmer]

Yes, I did see that figure. It is deeply concerning that those sorts of costs are even contemplated for that option in relation to technology that has not been developed or, in many respects, even invented. That is why there is such a bitter dispute going on in the Cabinet.

[Mr John Baron (Basildon and Billericay) (Con)]

Will the right hon. and learned Gentleman give way?

[Keir Starmer]

I am going to press on, if the hon. Gentleman does not mind. I will take other interventions later.

I realise that all sorts of fanciful promises about new customs arrangements were made during the referendum and have been made since, but we have a duty to protect our economy, jobs and the manufacturing sector across the UK. That is at the heart of today’s debate. The only way to uphold that duty is to negotiate a customs union with the EU.

There is, of course, another important aspect. In December last year, our Government made a solemn promise in the phase 1 agreement: no hard border in Northern Ireland. And that was spelt out—no infrastructure, no checks and no controls. Now, in all the to-ing and fro-ing yesterday, what may have been missed is that one amendment that went through, without any dissent from the Opposition, was a Government amendment to Lords amendment 25 for that obligation to be legally binding in UK law. That is a very significant amendment; after the political commitment in December to no hard border, no infrastructure, no checks and no controls, we now have a binding law to that effect. This goes to the issue of maximum facilitation, because if maximum facilitation does involve infrastructure, checks or controls, it would be unlawful under the provision passed yesterday. Therefore, it cannot happen.

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[Keir Starmer]

I am grateful for that intervention. When the phase 1 agreement was reached in December, I thought that commitment was the most significant thing that had happened since the referendum, with regard to indicating what our future relationship with the EU would be. I think that it is clear to everyone who has considered this and visited Northern Ireland to talk it through that the only answer to having no hard border, in the end, is a customs union and high-level single market alignment, and that is why yesterday was so significant. The fact that that was accepted by the Government and turned into domestic law gives it a status that it did not have until yesterday, because previously it was a political agreement at international level. I am not suggesting for one moment that it was not solemnly entered into by the Government, or indeed that they would resile from it as a matter of international negotiation, but it will now become a matter of domestic law. It is probably the most significant thing that happened yesterday.

[Mr Baron]

May I just remind the right hon. and learned Gentleman that the vast majority of people, not only at the referendum but at the general election—85% of those who voted—voted to leave the customs union and the single market? It was a very clear result. Let me ask him this one straightforward question, for clarity: in their search for a customs union, are the Opposition willing to sacrifice our ability to negotiate trade deals outside the EU in order the achieve that customs union with the EU?

[Keir Starmer]

We all want new trade deals. At the moment we have got an excellent trade deal with the EU, and we have 37 additional agreements with 67 countries through our membership of the EU. The first thing we need to do is preserve that. Lots has been said about new trade agreements and how they will be fast and how we will get much better terms than would be offered to any other country in the world. In fact, we are told that they will be queuing up to give us preferential treatment, and quickly. I think the Brexit Secretary said that by March next year we will have had trade deals with countries in an area that is geographically 10 times larger than the EU. Well, he has only a few months left to pull that one off. The Opposition consider that if new trade deals are struck together and jointly with the EU, we have a better chance of getting quicker and better trade deals.

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[The Solicitor General]

Of course we are listening to the job creators—I have mentioned that in the context of my own constituency experience, which is not dissimilar to the hon. Lady’s—which is why we have committed ourselves to the most frictionless possible trade. That said, any deal will have to represent Britain’s position as a third country rather than a part of the EEA structure.

[Mr Baron]

May I return the Solicitor General to what seems to have been the Opposition’s first admission that they are seeking a customs union that would not allow us to negotiate trade deals with countries outside the EU? They might be pessimistic about the way forward—they have quoted the CBI—but many people out there are saying that, provided we can negotiate trade deals with countries outside the EU, the future is very bright. It is a vital point that Labour would let down the electorate by not allowing us to trade.

[The Solicitor General]

My hon. Friend is right to remind us of one of the key planks of the Government’s policy: that important freedom to negotiate free trade deals that comes from being in law a third country.

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On the customs union, to which today’s amendments are most relevant, nobody says that there is anything wrong with it. Nobody says that it is undesirable that we currently have open borders. Presumably, they all accept that it is hugely beneficial to wide sectors of our economy. The only thing wrong with it is that we cannot do trade deals with the rest of the world. I would have thought that the debate should concentrate and focus on those two points.

[Mr Baron]

Will my right hon. and learned Friend give way?

[Mr Clarke]

No, because I have almost taken longer than I intended already.

Let us address freedom of movement. Personally, I do not have any hang-ups about freedom of movement—people coming to work here, contribute to the economy, provide skills that we do not have or do unskilled work that British people will not do—but it could be tightened up. People should not come here for benefits and so on, or hang around if they have lost their job. I am sure that we could start to negotiate on the basis of tightening that up.

[Mr Baron]

Will my right hon. and learned Friend give way on that point?

[Mr Clarke]

If I start giving way, we will go back to where we were before.

Similarly, on trade deals with the rest of the world, if anybody can devise a method of trading with other countries on our own that is consistent with a sensible customs arrangement and better than the deals that we have now used very successfully for a long time—with our being the leading nation pushing for EU deals with the rest of the world—that is fine, but let us not accidentally drift into a position in which we are making absurd demands of the EU that mean our leaving not only the customs union and single market, but losing all the advantages that particularly the best and most competitive sectors of our economy have by way of their existing access to the European market.

Some people seem to think that we can have an altogether different and better type of trade deal with other parts of the world. Quite irrelevant statistics are misused to make the case, such as that growth is faster in the rest of the world than it is in Europe. It is an underlying truth that growth in emerging and developing markets, which was very poor until we got going with the rules-based order in the 1990s, is faster than that of developed countries such as our own, and it is always going to be faster. There is also the argument that there is more of the outside world than there is of Europe. That is indeed the case, but for the past 20 years in particular, the United Kingdom has been the most influential player in the European Union in insisting on the steady attempt to negotiate trade deals with the world in general, and the numbers keep growing.

On the British Government’s behalf, I was involved on the fringes of the constant efforts to get an EU deal with the US—the so-called Transatlantic Trade and Investment Partnership. It did not fail because there was something wicked about the EU; the fact is that, unfortunately, protectionist influences in America are very strong, and were even under the Obama Administration. One cannot get any response. I have been involved in all these things—I have talked about trading openings with India and Brazil, which are of course where the population is. It is absolutely absurd to think that there are no protectionist pressures in India and Brazil and that it is simply a question of our present Foreign Secretary walking in, with his bonhomie, and saying, “You will of course now throw your markets open to us”.

It is also absurd to argue that somehow this approach will produce deals with less damage to our sovereignty and fewer constraints. I do not understand those arguments. What is the nature of a treaty embodying a trade deal—or any other treaty, come to that? Both sides agree mutually binding obligations. They agree on tariffs, and remove them where they can. But what is far more important in trade with developed countries, such as the US—I personally think that the few tariffs left there could be abolished both ways with no disadvantage—is talking about regulatory alignment.

In the EU, we have achieved regulatory harmonisation. What one wants is mutual recognition. We agree to say, “We will abide by arrangements on regulatory standards, on which we both agree, and we, the British, will not change them in our House of Commons. We will not go back on them, and you won’t go back on them.” If we listen, again, to the more zealous Eurosceptics, they seem to think that the world will throw open its doors when we arrive saying, “We want a trade deal with you—open trade.” “Fine”, say the Australians. So we say, “The rules are that you agree to this, this and this, and you take this, and we take that.” But then we say, “Of course, we may change the rules—we may change the scope occasionally. We do not, of course, undertake to fetter ourselves by any lasting obligation to what we have agreed with you.”

There are no such deals. It is fanciful, as the Secretary of State for International Trade discovered when he went to America. He no doubt believed, as they all did just after the referendum, that the doors were about to be thrown open and that we would get a deal with the Trump Administration by Christmas. He found, as indeed I did in my dealings with America, that things are different. The current President is hopeless. He wants to reduce the amount that we and others export to America, and he wants to use force in what he says are easy-to-win trade wars to get us to open up more of our markets to exports from the United States in sensitive areas. That is what he is about.

What is a constant in America—it is also true in Australia, New Zealand and Brazil, thinking of some of the bigger and easier markets—is that they are always anxious to have access to our market for their farmers. They produce food on an industrial scale to lower standards of animal welfare and food regulation than we have. President Trump will say, “We are going to sell you our beef and our chicken and some of our cereals on a bigger scale.” What will those countries want us to get rid of? They will want us to abandon the European regulations on animal welfare and food standards and take up theirs. It would cost us the European market if we did that, and we would have to have border guards everywhere because nobody would let us export to the rest of Europe or to Ireland, or be a route for, chlorinated chicken and hormone-treated beef. Australia has hormone-treated beef; it is not just the Americans. I will not go on, because I think I have made my point.

People are of course dismissed any time they try to point out the consequences of our ignoring reality in the modern world and what might happen to our economy—to Scotland and the rest of the UK—if we accidentally put all kinds of new barriers in the way of our trade. Unfortunately, the public have been persuaded by the Eurosceptics to ignore the Bank of England, the Treasury, the CBI, chambers of commerce, and people from key sectors of the economy such as the car industry and pharmaceuticals. It is all scaremongering, apparently —so we are told.

Actually, I do not see how anybody can argue that erecting new barriers between ourselves and the biggest, richest international free trade market in the world can do anything other than make us poorer than we were. That is why I do not understand why the Government are resisting the not very strong or compelling Lords amendment 1, on customs union, at all. They are only being asked to report on what efforts they are making to get there, and I think they are going to have to make efforts to get there.

The amendments in lieu are an attempt to devoid substantial amendments of any meaning. I would not vote with the Government on the meaningful vote yesterday, because I could not see that any commitment had been given; nor could I see any argument against what was on the amendment paper. I was very worried, because I thought that some of my close hon. Friends and colleagues were going to be very angry when they discovered that they had been fobbed off with an agreement just to discuss the possibility of changing the provision. They may yet have the last laugh on me—I am getting to be a cynic in my old age—as this morning they appeared to be getting somewhere in getting a more substantial system put in place, but we have yet to see the Brexiteers mount their full counter-attack. I will wait and see.

I will come back to the subject of this particular debate, as you will want me to do, Mr Speaker. What is being offered as an amendment in lieu, to use the jargon, is pathetic and utterly meaningless. We could save a bit of public money by saving the paper involved in putting it in the amendment paper and printing it. That probably explains why the amendments in lieu have been tabled by an extraordinarily wide range of Conservative MPs. As well as the Secretary of State, the list includes my hon. Friend the Member for Stone (Sir William Cash), my right hon. Friend the Member for Loughborough (Nicky Morgan), my hon. Friend the Member for North East Somerset (Mr Rees-Mogg) and so on. I know all these people and I do not believe that they agree on anything that has anything to do with the European Union, so what has induced them all to do this? I quite accept that there is a sense of deep loyalty to our party, which I assure the House I actually feel in every other way myself. I think that this is an excellent Government if it were not for their policy on leaving the European Union, but there we are.

What are we being asked to sign up to? The amendment says that it is “a customs arrangement”. Well, that covers anything. It is a phrase that the Prime Minister, for reasons that I have always understood, has slipped into several times because she cannot get the members of her Cabinet to agree on her using any other form of words. So for the time being she has been obliged to slip into talking about “a customs arrangement”. But that includes absolutely everything, from the kind of arrangements that would suit my hon. Friend the Member for North East Somerset to those that would suit my right hon. Friend the Member for Loughborough, but everything in between as well. It is a bit of a waste of a statement, coming back to say what efforts they have made to reach that extremely amorphous destination. Of course, that takes us back to the root of the whole problem, which is trying to arrive at a border policy.

To end on a more optimistic note, I think that most of us have noticed that a most important stride was made yesterday, as I have said, with an amendment tabled by the Government that was described as the Irish amendment. It is part of dealing with the argument about the Belfast agreement, and actually embodies the Belfast agreement in law. It goes further by reinforcing what the Prime Minister has actually been saying for some time, if we have been listening to her—that we are going to have a customs union, in effect, in Ireland, because there is going to be nothing new and no checks on the border. We are, in effect, going to be in the single market as far as Ireland is concerned, because we are having regulatory alignment. We agreed that. I think that the Cabinet agreed it—although some of them do not seem to have noticed—not too long ago, back at the time of the draft withdrawal agreement, which the Government are now trying to finalise. I actually think that that is where we should go.

The Government are still talking about frictionless trade. Unfortunately, thanks to the rows there have been, the slogan is now “as frictionless as possible” trade, which no doubt cheers up the Foreign Secretary. The truth is that we will have to have genuinely frictionless trade through arrangements on customs and regulatory alignment that preserve the benefits of all this for Ireland. Actually, the one thing that I think every Member of the House agrees on is that we do not want new barriers down the Irish sea. Northern Ireland is part of the Union—I am as Unionist as anybody here—and we are not putting up new barriers between the mainland and Northern Ireland when we leave.

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[Mr McFadden]

I cannot give way anymore because so many Members want to speak.

I know that there is a great deal of working-class disaffection behind the Brexit vote, and that people want action on migration and free movement. My right hon. and learned Friend the Member for Holborn and St Pancras read out a list of things we can address, and former Prime Minister Gordon Brown spoke about others in his speech last week. There are things that we can do, and we need to address working-class discontent, but we do not take the first step in doing so by voting for a path of making our country poorer, and of not generating the wealth required for the public services, regeneration, housing, and the better chance in life that our working-class communities need.

[Mr Baron]

Before speaking in support of Government amendments (a) and (b) in lieu of Lords amendments 1 and 2, to which I have put my name, I will briefly touch on the issue of immigration, which has been mentioned a number of times, particularly by the Scottish nationalists.

My education was very international. I did not return to start my education in this country until the age of 11. I suggest to those who say that Brexiteers tend to be anti-immigration that what many of us want is an immigration system that no longer discriminates against the rest of the world outside the EU. We are getting a little tired of the line that, somehow, we are anti-immigration. We want a controlled immigration policy, but we also want a fair immigration policy.

I suggest to Opposition Members that a controlled immigration policy—one that is fair to all and that no longer discriminates against any particular region—would actually help the wages of many in this country, because wages are a simple function of demand and supply. If we introduce a system of controlled and fair immigration, as Lord Rose admitted just prior to the referendum when questioned by the Treasury Committee, wages would rise faster but big business may not like it. Labour would be well advised to bear thought on that issue.

In addressing Government amendments (a) and (b) in lieu of Lords amendments 1 and 2, I will focus on the nature of the negotiations themselves. We have discovered today from the right hon. and learned Member for Holborn and St Pancras (Keir Starmer) that the price that Labour is prepared to pay to be part of a customs union or the customs union is to sacrifice the right to negotiate trade deals with other countries outside the EU. That came from the Labour Front-Bench spokesman, and I hope that Ministers take that on board, because it is an important deviation from what the Labour party promised at the last general election.

Putting the referendum to one side for a moment, the Labour party’s manifesto actually said that we will be leaving the customs union and the single market. Labour seems to have conveniently forgotten that point, and we must drill that home because Labour is betraying its core support by ignoring what it put in the manifesto on which it stood at the last general election. We should also remember that 85% of those who voted at the general election—the 43% or 44% we got, and the 41% the Labour party got—actually supported that policy.

On the business of tying the Government’s hands in the negotiations, those who have conducted any form of negotiation will understand that that makes for worse outcomes. There is no getting away from that point. It also flies in the face of precedent. It is an accepted practice that Governments negotiate treaties, as was the case at the time of the European Communities Act 1972, and with the Lisbon treaty, the Nice treaty and so on. I do not remember any argument that Parliament should undertake negotiations on those treaties being made by people who today are arguing that Parliament should dictate the Government’s course of action in international negotiations. There is an absolute contradiction on that policy.

We often hear those who campaign on this issue, or who challenge the Government’s position, quoting the EU or Michel Barnier as though their words are gospel. What they should remember is that we are party to a negotiation. What is said publicly in a negotiation does not always translate to reality in the negotiation itself, so I do not think that we should take at face value this talk of, “Oh, Michel Barnier said that and therefore it must be true.” Let us have a bit more questioning, particularly when a negotiation is being undertaken. All too often, the remarks of the EU and Michel Barnier are taken at face value, and that is wrong. It is all part of a negotiation.

Finally, turning to the amendments, my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke)—we agree on many things, but not necessarily on European matters—was absolutely right that this is a pragmatic compromise. A customs arrangement can cover all manner of different scenarios, and we will undoubtedly revisit this topic at a later stage, notably with the Trade Bill. A Bill concerning how the law will apply post Brexit is not best suited for a discussion of our future trade arrangements. He is absolutely right that it is meant to get us to that stage. This is a pragmatic compromise so that we can do that and then discuss these issues in more detail when the time comes. I therefore urge all Members to support the amendments.

[Mary Creagh]

I rise to speak to my amendment (e) in lieu of Lords amendment 3. If we want world-leading environmental protections, we need a world-leading environmental watchdog. Today, we awoke to warnings that one fifth of Britain’s wild mammals, our beloved wildcats, hedgehogs and water voles, are at high risk of extinction within the next 10 years. The EU’s role in monitoring, updating and enforcing environmental law will be lost after exit day. The Environment Secretary’s proposed watchdog does not backfill those functions, and it has no teeth. It has three major gaps: an enforcement gap, a climate change gap and a citizen gap.

First, the watchdog has an enforcement gap, because it cannot start legal proceedings and issue fines, unlike the European Court of Justice, whose threat of fines is the only thing to have galvanised Government action on air quality. Amendment (c), tabled by the right hon. Member for West Dorset (Sir Oliver Letwin), would give it the ability to start legal proceedings against the Government but is silent on the remedy to be applied.

Secondly, there is a climate change gap. The Committee on Climate Change warned that its omission from the watchdog’s remit

“would be artificial and potentially create problems”.

The Committee on Climate Change will hold the Government to account on the Climate Change Act 2008, but there will be no enforcement of our other climate change obligations. Who monitors progress towards our legally binding targets under the EU’s renewable energy directive? What happens to our EU emissions reduction targets? Will there be a gap if we leave the EU’s emissions trading system? Amendment (c) does not address that.

Thirdly, there is a citizen gap, because the watchdog does not provide access to environmental justice for UK citizens, who at present can go to the European Commission when there is a breach of environmental law. They can petition their Member of the European Parliament, who can then ask the Commission to investigate, and ultimately, the European Court of Justice to issue fines. There is nothing in the Government’s proposals or amendment (c) on that, so there are three gaps.

I turn to the environmental principles, which have cleaned up our rivers and beaches and reduced our reliance on landfill and dirty, polluting industry over the last 40 years. Under the Bill as introduced, they would be lost after exit day. Amendment (c) puts the principles back in the Bill—although a very important one, the principle of non-regression, is missing—but the Government would only have to “have regard to” them, rather than act “in accordance with” them. That is a much less stringent legal requirement, thereby creating the legal uncertainty that the Solicitor General said at the Dispatch Box he wished to avoid. It does not mention local government and public bodies, only national Government, and it is silent on how the body’s independence from Government will be guaranteed and how it will be protected from the fate of Thomas à Becket if it is too effective, after the Conservative and Liberal Democrat Government abolished the Royal Commission on Environmental Pollution and the Sustainable Development Commission in 2011. Previous Governments have form on abolishing environmental watchdogs whose criticisms of Government are a little too uncomfortable and tart. We do not want to set something up only for a future Government to shut it down.